The November Group of 35 City firms, until now committed to an open market solution to the problem of indemnity insurance, is considering giving support to a revamped mutual fund.
For two years, the group has campaigned for the abolition of the Solicitors Indemnity Fund (SIF) and earlier this year commissioned a study from insurance consultants Nelson Hurst & Marsh, which strongly advocated an open market system.
But now the group is discussing a commercial mutual fund. Unlike SIF, this mutual could refuse to give cover to firms with bad claims records. These firms could then apply to a separate mutual of “last resort” similar to that available to accountants.
Each firm would be individually assessed, as opposed to the broader risk banding formula proposed by the Law Society.
Last week group member Edward Coulson, of Hammond Suddards, branded Law Society suggestions that large firms would be better off with a mutual as “bizarre”.
David Swaffield, partner at November group member Hill Dickinson, said the group had not compromised: “We still believe the open market offers the most appropriate way forward but have always looked at all options sensibly. One option would be a full mutual. In a sense we are anxious to be seen as not just destructive.”
Last year, Clifford Chance left the group due to its outspoken opposition to a mutual fund.
Law Society spokeswoman, Barbara Calahane, said: “I am encouraged that people are considering the issues carefully.”